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Google (GOOG) Blows Away Analyst Expectations for Q1

Google (GOOG) sent a surge through the stock trading markets by reporting a 30 percent spike in its first quarter profits. This easily topped analyst expectations, and the after hours report ended a day of anxious anticipation that saw the stock’s price dip over $5. The company’s stock has been on a gradual decline over the course of the last year thanks to economic concerns and questions about the company’s advertising business model. Apparently some moderate adjustments to its ad formula were enough to get the job done.

The Internet search engine power said its first quarter earnings were $1.31 billion, or $4.12 per share. The incredible earnings really inspired stock investing after hours following the report. As investors quickly added the stock to their trading portfolio or personal stock portfolio, the share price spiked an incredible $76, or 17% in after hours stock trading.

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As with many companies succeeding during the US economic struggles, Google turned global to improve its revenue. The company said that for the first time in 9 1/2 years, it had more revenue outside the US than within. The first quarter earnings were a nice jump from the $1 billion, or $3.18 per share from the 2007 first quarter.

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The company actually said a higher expense to cover employee stock kept it from a $4.84 per share earning. This was significantly above the analyst projection of $4.52 excluding the employee stock expense. This 32 cent trouncing of the analyst expectation is really what got stock traders excited and gave the stock help. Investors were excited that the company’s news was much better than the picture that had been painted. The Google report will likely give the stock market help for a few days as well.

Following the exclusions, Google’s revenue was $3.7 billion. This was an incredible $100 million over what analysts had predicted. Many analysts are already suggesting that Yahoo may follow suit with a better than expected performance next week.

Although the news excited after hours investing, some economists believe the sharp jump could be short-lived. Some believe it is a reactionary jump based on results above expectations and not necessarily a true reflection of the market conditions. If this is true, the stock may be a target of covered call strategies as the covered call provides some downside protection in case the stock price reverses making for an excellent covered call trading example.

Google does have a one year target price, so even if the stock is shorted in the near-term, analysts seem to believe is a good pick for long-term stock trading strategies. The $651 price target is actually well below the stocks 52-week high trading price of over $747 per share. Because of its large market capitalization and high trading price, Google is prone to volatile. The stock reached a 52-week low price just above $412 recently. This means it has a 52-week range of around $335, which is staggering.

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[tags] US, GOOG, Google Inc., covered call strategies, covered call trading example, investing in stock options, personal stock portfolio, poweroptions, stock help, stock investing, stock market help, stock market investment strategies, stock options, stock trading [/tags]

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